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There are many areas in our lives where we can devise and implement cost avoidance strategies. Here are some these cost avoidance strategies for three areas: car rentals, new car purchases, and used car purchases.
Car Rental
Since car rental rates can vary greatly, shop around for the best basic rates and special offers. Once you have found the best rate, determine if the car rental company has a co-operative arrangement with any airlines to provide you with frequent flyer miles for your car rental. You can earn frequent flyer miles when you drive your rental car.
Many car rental companies also offer their own bonus system for frequent car rentals. You can rent a car at an inexpensive rate, earn frequent flyer miles, and get free rentals, upgrades, or other bonus features all at the same time.
Rental car companies offer various insurance and waiver options. Check with your insurance agent and credit card company in advance to avoid duplicating any coverage you may already have.
New Cars
You can save thousands of dollars over the lifetime of a car by selecting a model that combines a low purchase price with low financing, excellent insurance rates, high gasoline mileage, low maintenance, and low repair costs. Ask your local librarian for new car guides that contain this information.
Having selected a model, you can save hundreds of dollars by comparison shopping. Call at least five dealers for price quotes and let each know that you are calling others. This technique works.
Some lending institutions (notably credit unions) will provide you with detailed information regarding dealer cost for new automobiles in which you are interested. This information can be of invaluable assistance in negotiating with car sales people and save you hundreds of dollars.
Some lending institutions can obtain automobiles for you at fleet rates, thereby saving you money.
The Consumer Reports Annual Auto Issue is published in April of each year. You can read it at the library or buy it at your local newsstand. The information contained in this magazine can save you much money.
Remember there is no "cooling off" period on new car sales. Once you have signed a contract, you are obligated to buy the car.
Several car manufacturers are offering deals whereby you can earn down payment credit (sometime up to $5,000.00) simply by using a manufacturer-sponsored credit card. These offers change from year to year. Check it out for yourself.
Payment Options
The cheapest way to purchase a car is to pay cash, if you can. This avoids paying any interest. The second most inexpensive way to buy a car is to make a big down payment and take a short-term loan. The next method in order of cost importance is to make a small down payment with a short-term loan. The most expensive way to purchase a car is to make a small down payment with a long-term loan at a higher interest rate.
If you finance, make certain that you can pay on the principal without penalty. The more you pay on the principal and the earlier that you pay on the principal, you will save more money in interest charges and the sooner your payments will end. You can save a great deal of money by paying a small amount on the principal each month.
You can save if you shop around for your own financing rather than take the financing package offered by the dealer.
The National Highway Traffic Safety Administration operates an Auto Safety Hotline at 1-800-424-9393. This service can provide you with free, useful information on cars, child safety seats, or tires that you may be considering. They also offer the results of government crash tests.
Some services are available to help you obtain quotes form local car dealers. The service charges a fee to obtain price quotes form local dealer for the precise make and model car that you want. One such service is called CarBargains. They can be reached at 1-800-475-7283.
Used Cars
Before buying any used car:
a. Compare the seller's asking price with the average retail price in a "bluebook" or other guide to car prices found at many libraries, banks, and credit unions.
b. Have a mechanic you trust check the car, especially if the car is sold "as is."
Consider purchasing a used car from an individual you know and trust. They are more likely than other sellers to charge a lower price and point out any problems with the car.
Recall Research. You need to find out if the particular car you are thinking about buying was ever involved in a government-ordered recall for safety defects. You can save the cost of repairs if the car has a problem that was covered by a recall but never fixed. The manufacturer will still repair the vehicle no matter how long it has been since the recall took place. Find out the year, model designation and details on the car's equipment (power brakes, engine option, etc.) Call the national Highway Traffic Safety Administration (NHTSA) at 1-800-424-9393. They can tell you if any government-directed recalls apply to your car. Call the manufacturer of the vehicle to find out if the car was part of any voluntary recalls. Voluntary recall information may not be available from the NHTSA. This information may result in free repairs which otherwise may cost hundreds of dollars.
You may want to inspect a used car in a through manner before you consider making an offer. You can follow these guidelines.
Walk to where the car is parked. Look under the car to see if there are any spots under the engine (oil leak?), spots under the transmission (transmission leak?), and wheels (brake leak?).
Take a test drive. Drive the car in typical conditions. Drive it in side streets and highways, in stop-and-go traffic, and at high speeds to give yourself an idea on how the car handles.
Go to each corner of the car in turn. Put your full body weight on the corner and let go. If the car bounces more than twice, it may need shock absorbers.
Run you finger along the inside of the exhaust when the car in cool. Oily black buildup could indicate a valve or valve-seal problem.
Ask the salesman to start the car while you stand in the rear of the car and watch the exhaust. If the car blows smoke, that's a good indication that the vehicle will need major repairs.
Allow the car to run at idle for at least 10 to 15 minutes. Run the air conditioner while the car is running. This will enable you to see if the vehicle' engine will overheat. While you are at it, try the heater, radio, and the wipers.
Don't be in a hurry or let the salesperson hurry you in making a decision. You
are going to be driving the car for a while.
If you buy a used car and get a "lemon", take advantage of your state's Used Car Lemon Law. You may get a refund.
By using the strategies outlined above, you can save a great deal of money with your next car rental and your new or used car purchase.
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